| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥285.043B | ¥244.440B | +16.6% |
| Operating Income | - | - | - |
| Ordinary Income | ¥69.314B | ¥48.334B | +43.4% |
| Net Income | ¥50.604B | ¥37.933B | +33.4% |
| ROE | 3.1% | 2.4% | - |
Net interest income, fee income, and trading income all expanded broadly, resulting in a substantial 43.4% YoY increase in ordinary income. Ordinary revenue (equivalent to revenue) was ¥2,850.43B (¥2,444.40B in the previous year, YoY +16.6%), ordinary income was ¥693.14B (¥483.34B in the previous year, YoY +43.4%), and quarterly net income attributable to owners of the parent was ¥50.137B (¥37.690B in the previous year, YoY +33.0%). The background to ordinary income growing faster than revenue was an improvement in the expense ratio (general and administrative expenses / consolidated gross profit), as gross profit growth exceeded the increase in general and administrative expenses. The expense ratio was 50.8%, approximately 4.3pt lower than 55.1% in the previous year. Meanwhile, the effective tax rate rose to 26.8% from 21.2% in the previous year, contributing to net income growth of +33.0% falling below ordinary income growth of +43.4%.
【Revenue】Consolidated gross profit increased 29.0% to ¥140.345B (¥108.776B in the previous year), with all four divisions contributing to revenue growth. The Markets Business Division posted the highest growth at ¥23.350B (+49.1%), followed by the Wholesale Business Division at ¥37.210B (+34.1%), the Retail Business Division at ¥42.880B (+18.9%), and the Global Business Division at ¥38.670B (+7.6%). In addition to higher net interest income amid a rising interest-rate environment, growth in fee income and trading income supported the expansion in gross profit.
【Profit and Loss】Ordinary income increased 43.4% to ¥69.314B, outpacing gross profit growth of +29.0%, with the improvement in the expense ratio (50.8%, compared with 55.1% in the previous year) contributing to the increase. Extraordinary income and losses were extremely limited, consisting of extraordinary income of ¥0.005B and extraordinary losses of ¥0.167B, indicating that earnings growth was driven by the core business. On the other hand, the increase in the effective tax rate to 26.8% from 21.2% in the previous year caused net income attributable to owners of the parent to grow slightly slower (+33.0%) than ordinary income. Both revenue and profit increased.
By segment, consolidated business net profit (equivalent to operating profit/loss) for the Retail Business Division showed the highest growth rate, increasing 62.4% to ¥12.090B (¥7.450B in the previous year), followed by the Markets Business Division at ¥17.890B (¥11.490B, +55.7%). The Wholesale Business Division remained solid at ¥27.150B (¥21.930B, +19.8%), while the Global Business Division was the only segment to post a decline, decreasing 18.2% to ¥15.120B (¥18.470B). This was attributable to the increase in operating expenses (△¥26.910B, compared with △¥23.240B in the previous year) exceeding gross profit growth of +7.6%. Head Office Administration and Other narrowed its loss substantially to △¥0.019B (△¥4.912B in the previous year), boosting consolidated business net profit for the Company as a whole. While the two domestic divisions (Wholesale and Retail) and the Markets Division drove overall profit growth, declining profitability in the Global Division, including overseas operations, remains a structural issue to monitor.
【Profitability】The ordinary income margin was 24.3% (ordinary income of ¥69.314B / ordinary revenue of ¥2,850.43B), while the net profit margin (based on income attributable to owners of the parent) was 17.6%; both improved from the previous year. The expense ratio (general and administrative expenses / consolidated gross profit) improved by 4.3pt to 50.8% from 55.1% in the previous year, with improved cost efficiency being the primary factor behind the improvement in profitability.【Cash Flow Quality】The impact of extraordinary income and losses was limited (extraordinary income of ¥0.005B and extraordinary losses of ¥0.167B). Earnings growth was supported by recurring sources of income—net interest, fees, and trading—with limited dependence on temporary factors.【Investment Efficiency】ROE was 3.1%. Property, plant and equipment stood at ¥18.972B, while intangible assets stood at ¥117.760B; both increased slightly from the previous year.【Financial Soundness】The equity ratio was 5.0% (net assets of ¥1,624.070B / total assets of ¥32,746.956B), a slight improvement from 4.8% in the previous year. The loan-to-deposit ratio (loans / deposits) remained at a conservative 64.1%. Short-term bonds declined approximately 39.7% to ¥46.630B from ¥77.350B in the previous year, reducing reliance on short-term funding.
As cash flow statement data is not included within the disclosed scope, funding trends are reviewed based on changes in the balance sheet. Loans increased moderately to ¥11,975.824B (¥11,762.922B in the previous year, +1.8%), while deposits rose to ¥18,675.933B (¥18,567.424B, +0.6%), indicating stable expansion on both the asset and liability sides at a loan-to-deposit ratio of 64.1%. In terms of short-term funding, short-term bonds were reduced by approximately 39.7% from ¥77.350B to ¥46.630B, while commercial paper declined from ¥338.039B to ¥294.076B, indicating lower reliance on short-term liabilities. Meanwhile, treasury stock increased approximately 235% from ¥4.885B to ¥16.383B, indicating greater allocation of internal capital toward shareholder returns. Net assets increased 1.9% to ¥1,624.070B (¥1,593.314B in the previous year), primarily due to the accumulation of comprehensive income.
Recurring sources of income—net interest income, fee income, and trading income—were central to profit growth. As extraordinary income and losses were limited even on a net basis, consisting of extraordinary income of ¥0.005B and extraordinary losses of ¥0.167B, the increase in earnings for the period was largely independent of temporary factors. The difference between ordinary income of ¥69.314B and net income attributable to owners of the parent of ¥50.137B was primarily attributable to income taxes of ¥18.547B. The effective tax rate rose to 26.8% from 21.2% in the previous year, making the increase in the tax burden the main adjustment item in the bridge from ordinary income to net income. Comprehensive income was ¥73.100B (¥72.986B attributable to owners of the parent), substantially exceeding net income. The primary factors behind the difference were other comprehensive income related to securities and foreign exchange, including valuation differences on available-for-sale securities of +¥15.362B and foreign currency translation adjustments of +¥7.992B. These valuation-based unrealized gains are susceptible to market fluctuations and are more volatile than net income, which should be considered when assessing earnings quality.
Against the full-year net income plan (net income attributable to owners of the parent) of ¥170.000B, actual net income for Q1 was ¥50.137B, representing a progress rate of 29.5%, 4.5pt above the 25% benchmark based on simple quarterly averaging. No revisions were made to the earnings forecast or dividend forecast for the quarter, and the published plans remain unchanged. Double-digit growth in net interest income, fee income, and trading income all contributed to the higher progress rate. Q1 EPS was ¥131.62, a high quarterly result relative to the full-year EPS forecast of ¥223.58.
No revision was made to the dividend forecast for the quarter, and the previous year's dividend was ¥78 per share. At a meeting of the Board of Directors held on May 13, 2026, a two-for-one stock split of common shares, with September 30 as the record date, was approved. Accordingly, the stock split must be taken into account when assessing the continuity of per-share metrics going forward. Treasury stock increased to ¥16.383B (¥4.885B in the previous year, +235.4%), indicating a strengthening commitment to shareholder returns through share repurchases. As data on total dividends for the period could not be confirmed, the payout ratio was not calculated. However, based on net assets of ¥1,624.070B and net income attributable to owners of the parent of ¥50.137B, the Company appears to be proceeding with share repurchases while accumulating internal capital.
Margin environment risk: Although net interest income increased substantially year on year, during a period of rising deposit interest rates, funding costs may rise faster than lending yields. This could result in a slowdown in gross profit growth going forward.
Declining profitability in the Global Business Division: Consolidated business net profit in the Global Business Division declined 18.2% year on year to ¥15.120B, as operating expense growth (+15.8%) exceeded gross profit growth (+7.6%). The different earnings trend from the other divisions indicates the need to closely monitor the regional earnings structure.
Risk of earnings volatility due to a higher tax burden: The effective tax rate rose 5.6pt to 26.8% from 21.2% in the previous year, reducing net income growth (+33.0%) relative to ordinary income growth (+43.4%). Changes in the tax rate could affect the volatility of net income going forward.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 17.8% | – | – |
The Company's net profit margin of 17.8% is assessed on an absolute basis only, as reference data within the industry is limited.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 16.6% | – | – |
The revenue growth rate of 16.6% represents a high level of growth from the previous year, although comparative data against the industry median is currently limited.
Source: Compiled by the Company
The three pillars of net interest income, fee income, and trading income all expanded simultaneously, while the expense ratio improved to 50.8% from 55.1% in the previous year. This confirms a trend of profit growth supported by both broader revenue sources and improved cost efficiency.
The effective tax rate rose to 26.8% from 21.2% in the previous year, and net income growth of +33.0% fell below ordinary income growth of +43.4%. This should be noted as an adjustment factor when assessing the pace of future profit growth.
Treasury stock increased approximately 235% from ¥4.885B to ¥16.383B, and a stock split was approved, indicating increasingly active capital policy and shareholder-return initiatives.
This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings release data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting a professional as necessary.
---End of Report---